09 Feb

I Don’t Want to Plan My Exit From My Business

If you don’t want to plan your exit from your business then don’t.  It’s that simple.  However, that doesn’t mean you shouldn’t work on your business.  Work on your business to make it more productive, more efficient or as I like to say, help make it recession proof.  Being prepared is part of being successful at business.

With Baby Boomers owning most US Businesses it is understandable that the focus of many business consultants is to focus on helping them transition their businesses to others.  Why wouldn’t they, with roughly 10 trillion dollars of business involved it only makes sense.   But Baby Boomers don’t own everything, and not all Baby Boomers are thinking of retirement.  We are living longer than our parents and Grandparents so staying in the business longer also makes sense.  The youngest Baby Boomers are about 53.  They could have another 20 or 30 years of working life left if they choose.  Their businesses need to do things too.

If you don’t want to plan your exit, what should you do?

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19 Jan

How Do You Price Your Product or Service?

It appears to be a common practice.  A business owner figures out the price of labor and materials adds an “upcharge” and VOILA – they have the price for their product or service.  It is equally common for them to know that their competitor sells the product for $25 a pound and they meet that price.  Or, their competitor makes a product for $25 a pound and they meet that price.  No matter whether it is a product or a service the price strategy is the same…I will sell at the same rate as my competitor because that is the market.  That approach will ruin your business and easily could be decreasing your profit.

Why am I saying that?

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12 Jan

Have You Given Your Business a Checkup?

Good health is important.  It is important to our bodies, and it is important to our business.  When you care about the health of your business, you are demonstrating an interest in more than just the money that flows through it.  You are showing that you fully understand the different parts of your business that contribute to its success – its good health.  Just like we visit our Doctors once a year for a checkup, we take our cars to a mechanic for a tune-up, or we visit the Dentist for a cleaning, we should also conduct a checkup on our business at least once a year.  Some suggest conducting a checkup twice a tear.  Whichever you choose, you may be wondering – What exactly is a Business Checkup?

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05 Jan

Business Income or Business Value – More of the Story

If you are an owner of a small to mid-size business, the odds are that your business is what is sometimes called a “Life Style” business.  In other words, the business is there for an income with which you support yourself and family.  The more income you have, the better your lifestyle.

According to the Exit Planning Institute (EPI), most business owners have between 80 and 90 percent of their personal wealth tied up in their businesses.  Further:

  • About 63% of businesses are owned by Baby Boomers, and inevitably all of them will one day leave their business.
  • Of these, 83% have no plan for their future or the future of their business.
  • Half of these owners will need the business to be profitable after they exit.

Personal wealth does not come from revenue alone; it comes from the value of the business.  Value is linked to revenue.  You have to focus on BOTH to have the financial security to maintain your lifestyle.  So how do you do that?  (Business value also affects business loan eligibility and amount – that’s another story.)

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15 Dec

Business Revenue or Business Value? How About Both

If you are a small or mid-size business owner, I have a question for you?  What is more important to your business?  Is it how many dollars in service product that it sells?  Is it your Margin?  Or, is it the value of your business?  The answer should be yes. But which question(s) depends on what your long-term plans for your business are.

Depending on those plans each of those areas of focus have a different meaning.  In some instances they should mean everything; in others, they may mean little.  Regardless, all are important.  How important, again, depends on your plan for the business.

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